CERTIFICATE OF POWERS, DESIGNATIONS,
               PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL,
          OR OTHER SPECIAL RIGHTS OF THE 2002 SERIES A PREFERRED STOCK,
        2002 SERIES B PREFERRED STOCK, 2002 SERIES C PREFERRED STOCK AND
                          2002 SERIES D PREFERRED STOCK

                                       OF

                       SAFEGUARD HEALTH ENTERPRISES, INC.

It is hereby certified that:

The  name of the corporation (hereinafter called the "Corporation") is SafeGuard
Health  Enterprises,  Inc.  The  Corporation  is  organized  under  the  General
Corporation  Law  of  Delaware.

The  Stockholders and the Board of Directors of the Corporation have approved an
amendment to the Corporation's Restated Certificate of Incorporation to increase
the  total number of authorized shares of the Corporation from 41,000,000 shares
to  73,500,000 shares, consisting of 42,500,000 shares of Common Stock, $.01 par
value  per  share,  and 31,000,000 shares of Preferred Stock, $.01 par value per
share.

The  Certificate  of  Incorporation of the Corporation, as so amended, expressly
vests  in  the  Board  of  Directors  of  the Corporation the authority provided
therein  to  issue  any  or all of said shares of Preferred Stock in one or more
series and to fix by resolution or resolutions, the designations and the powers,
preferences  and  rights and the qualifications, limitations, or restrictions of
each  series  to  be  issued.

Previously, by a Certificate of Designation filed with the Secretary of State of
the  State  of  Delaware, the Corporation's Board of Directors designated 80,000
shares  as  Series A Preferred Stock, 80,000 shares as Series B Preferred Stock,
30,000  shares  as  Series  C  Preferred  Stock  and  110,000 shares as Series D
Preferred  Stock,  and  such  shares  were  issued  on  January 31, 2001 and are
currently  outstanding  (collectively,  the  "2001  Preferred  Stock").

The  Board of Directors of the Corporation, as noted below, has designated a new
series  of  Preferred  Stock  to  be  exchanged  as  herein  specified  for  the
outstanding  shares  of  2001  Preferred  Stock.


                                        1
<PAGE>
Upon  the  filing  of  this  Certificate, each share of the 2001 Preferred Stock
currently  outstanding  is  hereby  automatically  converted  into  the right to
receive upon exchange therefor 100 shares of the same series (i.e., Series A for
Series  A)  of  the  newly authorized and designated 2002 Preferred Stock, which
will  have  the  rights  and  preferences  as  specified  herein.

Each  share of the 2001 Preferred Stock is hereby converted and upon exchange is
hereby  retired.

The  Board  of Directors of the Corporation, pursuant to the authority expressly
vested  in it, has adopted the following resolutions relating to creating issues
of the 2002 Series A Preferred Stock, 2002 Series B Preferred Stock, 2002 Series
C  Preferred  Stock  and  2002  Series  D  Preferred  Stock:

          RESOLVED  that,  pursuant  to  Article  FOUR  of  the  Certificate  of
     Incorporation  of  the  Corporation,  there be and hereby is authorized and
     created  four  series  of  Preferred  Stock, hereby designated as (i) "2002
     Series  A  Preferred  Stock,  " such series to consist of 8,000,000 shares,
     $.01  par  value;  (ii)  "2002  Series  B  Preferred Stock", such series to
     consist of 8,000,000 shares, $.01 par value; (iii) "2002 Series C Preferred
     Stock",  such  series  to  consist of 3,000,000 shares, $.01 par value; and
     (iv)  "2002 Series D Preferred Stock", such series to consist of 11,000,000
     shares,  $.01  par  value;  and  the  designations,  full or limited voting
     powers, preferences and relative, participating, optional and other special
     rights  and  the  qualifications,  limitations,  restrictions  and  other
     distinguishing  characteristics  of  2002  Series  A  Preferred Stock, 2002
     Series  B  Preferred Stock, 2002 Series C Preferred Stock and 2002 Series D
     Preferred Stock (hereinafter collectively called the "Preferred Stock") are
     to  be  as  follows:

     1.   Dividends.  The  holders  of the Preferred Stock shall not be entitled
          ---------
to  any  preferential  dividends.  The  holders  of the Preferred Stock shall be
entitled  to  participate on an as-converted basis in any dividends declared and
paid  on  the  Common  Stock  or  any  Junior  Stock.

     2.   Redemption.  At any time on or after January 31, 2011, but not before,
          ----------
the  Corporation  may  redeem  the  whole  or  any  part of the then outstanding
Preferred  Stock at any time and from time to time at the option of the Board of
Directors  pursuant  to  the  provisions  of  Paragraph  3 hereof, by paying the
Redemption  Price.  The  Redemption  Price shall be equal to the amount of $1.00
per  share  and  the  Redemption Price plus declared but unpaid dividends to the
date  fixed  for  redemption  shall  be  paid  for each share of Preferred Stock
redeemed.


                                        2
<PAGE>
     3.   Notice  of  Redemption; Depository.  In the event that the Corporation
          ----------------------------------
shall  redeem  any Preferred Stock, notice thereof shall be sent at least thirty
(30)  days  prior  to  the redemption date to the holders of the Preferred Stock
being  redeemed  by  registered or certified mail, postage prepaid, to each such
registered  holder  as  his  address  shall  appear on the stock register of the
Corporation.  In the case of a redemption of only a part of the Preferred Stock,
the  Corporation  shall  be  required  to  redeem: (i) all of the shares of 2002
Series A Preferred Stock before the redemption of any shares of 2002 Series B, C
or  D  Preferred  Stock; (ii) all of the shares of 2002 Series B Preferred Stock
before  the  redemption  of any shares of 2002 Series C or D Preferred Stock and
(iii)  all  of the shares of 2002 Series C Preferred Stock before the redemption
of any shares of 2002 Series D Preferred Stock. In the case of the redemption of
only  a  part  of  the  shares of any series of Preferred Stock, the Corporation
shall  make such redemption on a pro rata basis based on the number of shares of
such  series of Preferred Stock held by a holder compared to the total number of
all  shares  of  such  series of Preferred Stock then outstanding.  The Board of
Directors  shall  have full power and authority to prescribe the manner in which
and,  subject  to the provisions and limitations herein contained, the terms and
conditions  upon  which the Preferred Stock shall be redeemed from time to time.
If  after  notice  of redemption of all or any of the Preferred Stock shall have
been  duly  given  as  in  this  paragraph  provided,  and  if  on or before the
redemption  date given in such notice, the Corporation shall deposit with a bank
or trust corporation having a capital stock and surplus of at least $100,000,000
(the  "Depositary")  in  trust  to be applied to the redemption of the Preferred
Stock  so  called  for  redemption,  an  amount  sufficient  to  redeem all such
Preferred  Stock  upon  the  date  specified  in the notice of redemption, then,
notwithstanding  that  any  certificate  for  Preferred  Stock  so  called  for
redemption  shall not have been surrendered for cancellation, from and after the
redemption  date  all  rights  of  holders  of the Preferred Stock so called for
redemption  as  stockholders  of the Corporation (including the right to receive
dividends)  shall  cease.  The  holder  of such Preferred Stock to convert on or
before  the  redemption  date  all  or  a part of the Preferred Stock called for
redemption  as  provided  in  Paragraph  6 or the right to receive the moneys so
deposited  in  trust  for  said  series,  but  without  interest;  any moneys so
deposited  for Preferred Stock which is converted shall be immediately repayable
to  the  Corporation and any other moneys so deposited which remain unclaimed at
the  end  of  two (2) years from the date of such deposit shall be repaid to the
Corporation,  after  which  event the holders of such Preferred Stock shall look
only  to  the  Corporation  for  payment  of  the  Redemption  Price (subject to
applicable  escheat  or  similar  laws).

     4.   Liquidation.  Subject  to the provisions of Paragraph 6 hereof, in the
          -----------
event  of  any  liquidation,  dissolution  or  winding-up  of the affairs of the
Corporation,  the holders of the Preferred Stock shall be entitled to be paid in
full  the  sum  of  $1.00  per  share,  together  with


                                        3
<PAGE>
declared  but unpaid dividends, before any distribution or payment shall be made
to  the  holders of the Common Stock or any Junior Stock of any class or series.
The  preferential liquidation rights of the Preferred Stock shall be as follows:
(i)  2002  Series  A  Preferred Stock shall be senior to 2002 Series B, C, and D
Preferred  Stock;  (ii)  2002  Series  B Preferred Stock shall be senior to 2002
Series C and D Preferred Stock; and (iii) 2002 Series C Preferred Stock shall be
senior  to  2002  Series D Preferred Stock.  The liquidation preferences granted
pursuant to this paragraph to the holders of the Preferred Stock shall be senior
to  any  liquidation rights of the Common Stock.  If, upon any such liquidation,
dissolution or winding up of the Corporation, the assets distributable among the
holders  of  the  Preferred Stock shall be insufficient to permit the payment in
full  to all such holders of the preferential amounts hereinabove provided, then
the  entire assets of the Corporation available for distribution to stockholders
shall  be  applied to the redemption of the Preferred Stock then outstanding, in
the  order  of  seniority stated above, so that all the shares of each series of
Preferred  Stock  are  paid  the full preferential liquidation amount before any
liquidation  payment  is  made  with  respect  to  any  shares  of any series of
Preferred  Stock  to  which  such  series  is  senior.

          After  such  payment in full to the holders of the Preferred Stock, as
hereinabove  provided,  the holders of the Preferred Stock shall not be entitled
to  any  further  preferential  liquidation  payments.

          The sale, conveyance, exchange or transfer (for cash, shares of stock,
securities  or  other consideration) of all or substantially all of the property
and  assets  of  the  Corporation  shall  be  deemed  a  voluntary  dissolution,
liquidation  or winding up of the Corporation for the purposes of this Paragraph
4,  but  the  merger  or  consolidation  of the Corporation to or with any other
corporation or the merger or consolidation of any other corporation into or with
the Corporation, shall not be deemed to be a dissolution, liquidation or winding
up,  voluntary  or  involuntary,  for  the  purposes  of  this  Paragraph  4.

     5.   No  Reissue  of  Preferred  Stock.  None of the Preferred Stock of the
          ---------------------------------
Corporation  acquired  pursuant  to the provisions of Paragraph 2 or surrendered
for conversion pursuant to Paragraph 6, or otherwise acquired by the Corporation
in any manner shall be reissued, but the Corporation shall from time to time and
at  convenient  times  cause  all  such  stock to be retired and canceled in the
manner  provided  by  law  and  its  capital  to  be  reduced  accordingly.


                                        4
<PAGE>
     6.   Conversion.
          ----------

          (a)  Conversion  of Preferred Stock into Common Stock.  Subject to the
               ------------------------------------------------
provisions  of  Paragraphs  2 and 4 hereof regarding redemption and liquidation,
and  subject  to the terms and conditions of this Paragraph 6, the holder of any
share  or  shares  of Preferred Stock shall have the right, at its option at any
time,  to convert any such shares of Preferred Stock (except that (i) in respect
of  any  such stock which shall have been called for redemption such right shall
terminate  at  the  close of business on the day fixed for redemption unless the
Corporation  shall default in the payment of the Redemption Price (together with
all  declared but unpaid dividends as of the date of redemption) and (ii) on any
liquidation  of  the  Corporation the right of conversion shall terminate at the
close  of  business on the last full business day before the date fixed for full
payment  of  the  distributable amount on the Preferred Stock if then paid) into
such  number  of  fully  paid  and  nonassessable  shares  of Common Stock as is
obtained  by  multiplying  the  number  of  shares  of  Preferred Stock so to be
converted by the preferential liquidation amount of $1.00 per share and dividing
the  result by the conversion price of $1.00 per share or, in case an adjustment
of  such  conversion price has taken place pursuant to the further provisions of
this Paragraph 6, then by the conversion price as last adjusted and in effect at
the  date  any share or shares of Preferred Stock are surrendered for conversion
(such  price  or such price as last adjusted, as the case may be, being referred
to  herein  as  the  "Conversion  Price").  Such  rights  of conversion shall be
exercised by the holder of the Preferred Stock by giving written notice that the
holder  elects  to  convert  a  stated  number of shares of Preferred Stock into
Common Stock and by surrender of a certificate or certificates for the Preferred
Stock so to be converted to the transfer agent of the Corporation (or such other
office  or  agency of the Corporation as the Corporation may designate by notice
in  writing  to the holder or holders of the Preferred Stock) at any time during
its  usual  business hours on the date set forth in such notice, together with a
statement  of  the  name  or  names  (with  address) in which the certificate or
certificates  for  shares  of  Common  Stock  shall  be  issued.

          (b)  Issuance  of  Certificates;  Time  Conversion Effected.  Promptly
               ------------------------------------------------------
after  the  receipt  of  the  written  notice  referred to in Paragraph 6(a) and
surrender  of  the  share  or  shares  of  Preferred  Stock to be converted, the
Corporation shall issue and deliver, or cause to be issued and delivered, to the
holder,  registered  in  such  name  or  names  as  such  holder  may  direct, a
certificate  or  certificates for the number of shares of Common Stock, issuable
upon  the  conversion of such share or shares thereof To the extent permitted by
law,  such  conversion  shall be deemed to have been effected and the Conversion
Price  shall be determined as of the close of business on the date on which such
notice  shall  have  been  received  by  the  Corporation  and  the


                                        5
<PAGE>
certificate  for  such share or shares shall have been surrendered as aforesaid,
and at such time the rights of the holder of such share or shares as such holder
shall cease, and the person or persons in whose name or names any certificate or
certificates  for  shares of Common Stock shall be issuable upon such conversion
shall  be  deemed  to  have become the holder or holders of record of the shares
represented  thereby.

          (c)  Fractional  Shares; Dividends; Partial Conversion.  No fractional
               -------------------------------------------------
shares  shall be issued upon conversion of Preferred Stock into Common Stock and
no  payment  or  adjustment  shall be made upon any conversion on account of any
cash dividends (except as provided in Paragraph 6(e)) on the Common Stock issued
upon such conversion.  At the time of each conversion, the Corporation shall, to
the  extent  permitted  by law, pay in cash all dividends declared and unpaid on
the shares of Preferred Stock surrendered for conversion.  In case the number of
shares  of  Preferred  Stock  represented  by  the  certificate  or certificates
surrendered  pursuant  to Paragraph 6(a) exceeds the number of shares converted,
the  Corporation  shall, upon such conversion, execute and deliver to the holder
thereof,  at  the  expense of the Corporation, a new certificate or certificates
for  the  number  of shares of Preferred Stock represented by the certificate or
certificates  surrendered  which  are  not  to  be converted.  If any fractional
interest  in  a  share  of  Common Stock would, except for the provisions of the
first  sentence of this Paragraph 6(c), be deliverable upon any such conversion,
the  Corporation,  in lieu of delivering the fractional share thereof, shall pay
to  the  holder  surrendering  Preferred  Stock for conversion an amount in cash
equal  to  the  current  Market  Value of such fractional interest determined in
conformity  with  the  principles  set  forth  in  Paragraph  6(d)(l0).

          (d)(1)    Adjustment of Conversion Price Upon Issuance of Common Stock
and  Other  Securities.

               (i)  Except as provided in Paragraph 6(d)(5), if and whenever the
     Corporation  shall  issue  or  sell  any  shares  of its Common Stock for a
     consideration  per  share  less than the Conversion Price then in effect on
     the  date  of  such issue or sale, then, forthwith upon such issue or sale,
     the  Conversion  Price  shall  be  reduced  to the price (calculated to the
     nearest  cent, a half cent or more being considered a full cent) determined
     by multiplying the Conversion Price in effect immediately prior to the time
     of  such  issue  or sale by a fraction, the numerator of which shall be the
     sum  of  (i)  the  number of shares of Common Stock outstanding immediately
     prior  to  such  issue or sale multiplied by the Conversion Price in effect
     immediately  prior  to  such  issue  or  sale  plus  (ii) the consideration
     received  by  the  Corporation  upon  such  issue  or  sale,  and  the


                                        6
<PAGE>
     denominator  of  which  shall  be  the product of (iii) the total number of
     shares  of  Common  Stock outstanding immediately after such issue or sale,
     multiplied by (iv) the Conversion Price in effect immediately prior to such
     issue  or  sale.

                    For the purposes of the foregoing calculation, all shares of
     Common  Stock  of  the  Corporation  issuable  upon  conversion of all then
     outstanding  convertible  securities  and  upon  exercise  of  all  then
     outstanding options, warrants or other rights to acquire Common Stock shall
     be  deemed  outstanding  but  only to the extent and only if (a) the Market
     Value  of  the Common Stock of the Corporation on the date of such issue or
     sale  is  in  excess of the conversion price of such convertible securities
     then  in  effect  or  the exercise price of such options, warrants or other
     rights  then  in  effect,  respectively, and (b) the conversion or exercise
     right  is  not  subject  to  any  vesting  condition based on the continued
     employment  for  a period of more than six (6) months by the Corporation of
     the  purchaser  or  recipient  thereof.

               (ii)  In  case  of the issuance or sale of shares of Common Stock
     for  a consideration part or all of which shall be cash, the amount of cash
     consideration  therefore  shall be deemed to be the amount of cash received
     by  the  Corporation  for  such  shares  (or, if shares of Common Stock are
     offered by the Corporation for subscription, the subscription price, or, if
     shares  of Common Stock shall be sold to underwriters or dealers for public
     offering  without  a  subscription  offering,  the  initial public offering
     price)  without  deducting  therefrom  any  compensation  paid  or discount
     allowed  in  the  sale, underwriting or purchase thereof by underwriters or
     dealers  or  others performing similar services or any expenses incurred in
     connection  therewith.

               (iii)  In  case  of  the  issuance  or  sale (otherwise than as a
     dividend  or  other  distribution  on  or  subdivision  of any stock of the
     Corporation  or  on  conversion  or  exchange  of  other  securities of the
     Corporation)  of  shares of Common Stock for a consideration part or all of
     which  shall  be other than cash, the amount of the consideration therefore
     other  than  cash shall be deemed to be the value of such consideration, as
     determined  in  good faith by the Board of Directors of the Corporation, at
     or about, but as of, the date of the adoption of the resolution authorizing
     such  issuance  for  a  consideration  other than cash of such Common Stock
     immediately  prior  to  the  close  of  business  on the date fixed for the
     determination  of  security  holders entitled to receive such Common Stock.


                                        7
<PAGE>
               (iv)  Shares of Common Stock issuable by way of dividend or other
     distribution  on  or  subdivision  of any stock of the Corporation shall be
     deemed to have been issued immediately after the opening of business on the
     date  following  the  date  fixed  for  the  determination  of stockholders
     entitled  to  receive  such  dividend or other distribution or subdivision.

          (d)(2)    Except  as  hereinafter  provided,  in  case the Corporation
shall at any time after the date hereof issue options or rights to subscribe for
shares of Common Stock (including shares held in the Corporation's treasury), or
issue  any  securities  convertible  into  or  exchangeable for shares of Common
Stock,  for  consideration  per  share  less than the Conversion Price in effect
immediately  prior  to  the issuance of such options or rights or convertible or
exchangeable  securities,  or  without  consideration,  the  Conversion Price in
effect immediately prior to the issuance of such options or rights or securities
shall  be  increased or reduced to a price determined by making a computation in
accordance with the provisions of Paragraph 6(d)(1) and the following:

               (i)  the  aggregate  maximum  number  of  shares  of Common Stock
     deliverable  under  such options or rights shall be considered to have been
     delivered  at  the  time  such  options  or  rights  were issued, and for a
     consideration  equal  to  the  purchase  price  per  share  of Common Stock
     provided  for in such options or rights, plus the consideration (determined
     in the same manner as consideration received on the issue or sale of Common
     Stock),  if  any,  received  by the Corporation for such options or rights;

               (ii)  the  aggregate  maximum  number  of  shares of Common Stock
     deliverable upon conversion of or exchange for any such securities shall be
     considered  to  have  been  delivered  at  the  time  of  issuance  of such
     securities,  and for a consideration equal to the consideration (determined
     in the same manner as consideration received on the issue or sale of Common
     Stock)  received  by  the  Corporation  for  such  securities,  plus  the
     consideration,  if any, to be received by the Corporation upon the exchange
     or  conversion  thereof,  and

               (iii)  on  the  expiration  of  such  options  or  rights, or the
     termination  of  such right to convert or exchange, if none or only part of
     such  options  or  rights  have  been exercised, the Conversion Price shall
     forthwith  be  readjusted  to  such  Conversion  Price  as  would have been
     obtained had the adjustments made upon the issuance of such options, rights
     or  convertible  or exchangeable securities been made upon the basis of the
     delivery


                                        8
<PAGE>
     of  only  the  number of shares of Common Stock actually delivered upon the
     exercise  of  such options or rights or upon conversion or exchange of such
     securities.

          (d)(3)    In  the  event the Corporation shall issue additional shares
of  Common  Stock  in  a  stock dividend, stock distribution or subdivision, the
Conversion  Price  in  effect  immediately  prior  to such stock dividend, stock
distribution  or  subdivision shall, concurrently with the effectiveness of such
stock dividend, stock distribution or subdivision, be proportionately decreased.

          (d)(4)    In the event the outstanding shares of Common Stock shall be
combined or consolidated, by reclassification or otherwise, into a lesser number
of  shares  of Common Stock, the Conversion Price in effective immediately prior
to  such combination or consolidation shall, concurrently with the effectiveness
of  such  combination  or  consolidation,  be  proportionately  increased.

          (d)(5)    Notwithstanding  anything  contained herein to the contrary,
no adjustment of the Conversion Price shall be made:

               (i)  In connection with the issuance or sale of Common Stock upon
     the  exercise  of  options  or rights or upon the conversion or exchange of
     convertible  or  exchangeable securities in any case where an adjustment of
     the Conversion Price was made upon the issuance of such options, rights, or
     convertible  or exchangeable securities by reason of the provisions of this
     Paragraph  6(d).

               (ii)  In  connection  with  grants  to  employees,  directors,
     consultants  or  others  with similar relationships with the Corporation or
     its  subsidiaries  of options to purchase, at a price equal to or in excess
     of  Market  Value as determined by the Board of Directors of the Company at
     the time of grant, shares of Common Stock of the Corporation.

               (iii)  In connection with any issuance or sale of Common Stock to
     officers,  directors  or  employees  of, or consultants to, the Corporation
     pursuant  to  a  grant  or  plan  approved by the Board of Directors of the
     Corporation.

               (iv) In connection with any acquisition of assets, securities, or
     a  business  or  any  exchange  of securities to acquire all or part of any
     business,  provided  that


                                        9
<PAGE>
     such acquisition or exchange has been approved by the Board of Directors of
     the  Corporation.

               (v)  In  connection  with  the  issuance of Common Stock or other
     securities  upon  the  conversion  of  the  Preferred  Stock.

          (d)(6)    If  any  capital  reorganization  or reclassification of the
capital  stock of the Corporation (other than a change in par value, or from par
value  to  no  par  value, or as a result of the subdivision or combination), or
consolidation  or merger of the Corporation with another corporation (other than
a consolidation or merger in which the Corporation is the continuing corporation
and  which  does  not  result  in any reclassification of the outstanding Common
Stock),  or  the  sale  of  all  or  substantially  all of its assets to another
corporation  shall  be  effective,  then, as a condition of such reorganization,
reclassification,  consolidation,  merger or sale, lawful and adequate provision
shall  be  made  whereby  the  holder  hereof shall thereafter have the right to
purchase  and receive upon the basis and upon the terms and conditions specified
for  the  Preferred  Stock  and  in lieu of the shares of Common Stock and other
capital  stock  (if  any) of the Corporation immediately theretofore purchasable
and  receivable  upon  the exercise of the conversion rights represented hereby,
such  shares  of  stock,  securities  or assets as may be issued or payable with
respect  to  or  in  exchange  for a number of outstanding shares of such Common
Stock  and  other  capital  stock (if any) equal to the number of shares of such
Common  Stock  and  other  capital  stock  (if  any)  immediately  theretofore
purchasable  and  receivable  upon  the  exercise  of  the  conversion  rights
represented  hereby  had  such  reorganization, reclassification, consolidation,
merger  or  sale  not  taken  place, and in any such case appropriate provisions
shall  be  made  with  respect  to the rights and interest of the holders of the
Preferred  Stock  to  the  end  that  the  provisions hereof shall thereafter be
applicable,  as nearly as may be, in relation to any shares of stock, securities
or  assets thereafter deliverable upon exercise hereof The Corporation shall not
effect any such consolidation, merger or sale, unless prior to or simultaneously
with  the  consummation  thereof  the  successor  corporation (if other than the
Corporation)  resulting  from  such  consolidation  or merger or the corporation
purchasing  such  assets  shall  assume  by written instrument the obligation to
deliver  to  such  holder  such  shares  of  stock,  securities or assets as, in
accordance  with  the  foregoing  provisions,  such  holder  may  be entitled to
purchase  and the other obligations granted herein. The adjustments provided for
in this Paragraph 6(d)(6) shall apply with respect to each such change occurring
while  the  Preferred  Stock  is  outstanding.

          (d)(7)    In  case  at  any  time:


                                       10
<PAGE>
               (i)  The  Corporation  shall declare any dividend upon its Common
     Stock  payable otherwise than in cash or in Common Stock of the Corporation
     or payable otherwise than out of consolidated net income for a twelve-month
     period ending not earlier than 90 days prior to the date of payment of such
     dividend;  or

               (ii)  The Corporation shall offer for subscription to the holders
     of  its  Common  Stock  any  additional shares of stock of any class or any
     other  securities  convertible  into  shares  of  stock  or  any  rights to
     subscribe  thereto  other  than the sale of any additional shares of Common
     Stock  contemplated  under  the  Agreement;  or

               (iii)  There  shall  be  any  capital  reorganization  or
     reclassification  of the capital stock of the Corporation, or a sale of all
     or  substantially  all of the assets of the Corporation, or a consolidation
     or  merger of the Corporation with another corporation (other than a merger
     with  a  subsidiary  in  which  merger  the  Corporation  is the continuing
     corporation  and  which does not result in any reclassification), or change
     of  the  then  outstanding  shares  of  Common Stock or other capital stock
     issuable upon conversion of the Preferred Stock (other than a change in par
     value,  or from par value or as a result of subdivision or combination); or

               (iv)  There  shall  be  a  voluntary  or involuntary dissolution,
     liquidation  or  winding  up  of  the  Corporation.

then, in any one or more of said cases, the Corporation shall cause to be mailed
to  each  of  the  registered  holders  of  the  Preferred Stock at the earliest
practicable  time  (and,  in  any event, not less than 20 days before any record
date  or  other  date  set for definitive action), written notice of the date on
which  the  books  of the Corporation shall close or a record shall be taken for
such  dividend,  distribution  or  subscription  rights  or such reorganization,
reclassification, sale, consolidation, merger, dissolution, or liquidation shall
take  place,  as the case may be. Such notice shall also set forth such facts as
shall indicate the effect of such action (to the extent such effect may be known
at  the  date of such notice) on the Conversion Price and the kind and amount of
the  shares  of  stock  and  other  securities which thereafter will be properly
deliverable  upon  conversion  of  the  Preferred Stock.  Such notice shall also
specify  the  date  as  of which the holders of the Common Stock of record shall
participate  in  said  dividend, distribution or subscription rights or shall be
entitled  to  exchange  their  Common  Stock  for  securities  or other property
deliverable  upon  such  reorganization,  reclassification, sale, consolidation,
merger,  dissolution,  liquidation, winding up or conversion, as the case may be
(on  which  date,  in  the  event  of


                                       11
<PAGE>
voluntary  or  involuntary  dissolution,  or liquidation of the Corporation, the
right  to  convert  the  Preferred  Stock  shall  terminate).

          (d)(8)    Record Date.  In case the Corporation shall take a record of
                    -----------
the holders of its Common Stock for the purpose of entitling them (i) to receive
a dividend or other distribution payable in Common Stock, Options or Convertible
Securities,  or  (ii)  to  subscribe  for  or  purchase Common Stock, Options or
Convertible  Securities, then such record date shall be deemed to be the date of
the  issue  or  sale of the shares of Common Stock deemed to have been issued or
sold  upon  the  declaration  of  such  dividend  or  the  making  of such other
distribution  or  the  date  of  the  granting  of such right of subscription or
purchase,  as  the  case  may  be.

          (d)(9)    Treasury  Shares.  The  number  of  shares  of  Common Stock
                    ----------------
outstanding  at  any given time shall not include shares owned or held by or for
the  account of the Corporation, and the disposition of any such shares shall be
considered  an  issue or sale of Common Stock for the purposes of this Paragraph
6(d).

          (d)(10)   Definition of Market Value.  "Market Value" for the purposes
                    --------------------------
of  this  Paragraph 6 shall mean the average of the closing prices of the Common
Stock  for  sales on all national securities exchanges on which the Common Stock
may  at  the  time  be listed, or, if there shall have been no sales on any such
exchange  on any such day, the average of the bid and asked prices at the end of
such  day,  or,  if  the Common Stock shall not be so listed, the average of the
high  and low bid and asked prices on such day in the over-the-counter market as
reported  by  the  National  Quotation  Bureau,  Incorporated,  or  any  similar
successor  organization,  in  each  such case averaged over a period of ten (10)
consecutive  business  days prior to the day as of which "Market Value" is being
determined; provided that if the Common Stock is listed on any domestic exchange
the  term  "business  days" as used in this sentence shall mean business days on
which  such exchange is open for trading. If at any time the Common Stock is not
listed  on  any  national  securities exchange or quoted in the over-the-counter
market,  the  "Market  Value"  shall  be deemed to be the higher of (i) the book
value  thereof,  as  determined by any firm of independent public accountants of
recognized standing selected by the Board of Directors of the Corporation, as at
the last day of any month ending within sixty (60) days preceding the date as of
which the determination is to be made, or (ii) the fair value thereof determined
in good faith by the Board of Directors of the Corporation as of a date which is
within  fifteen  (15)  days  of  the date as of which the determination is to be
made.

          (e)  Liquidating Dividends.  The Corporation will not pay or declare a
               ---------------------
dividend  upon  the  Common  Stock  payable  otherwise  than out of consolidated
earnings  or


                                       12
<PAGE>
consolidated  earned  surplus  (determined in accordance with generally accepted
accounting  principles,  including  the  making  of  appropriate  deductions for
minority  interests,  if  any,  in  subsidiaries) or in Common Stock, unless the
holders  of at least 75% of the outstanding shares of Preferred Stock shall have
consented  to  such  dividend in writing, and, in the event that the Corporation
shall  pay or declare a dividend payable otherwise than out of such consolidated
earnings  or consolidated earned surplus with such consent, the Corporation will
pay  over  to  such holders of Preferred Stock pro rata, on the dividend payment
date,  the  cash,  stock  or other securities and other property which each such
holder  would  have  received  if it had converted all shares of Preferred Stock
then  held by it into Common Stock and had been the record holder of such Common
Stock  on the date on which a record is taken for the purposes of such dividend,
or,  if  a record is not taken, the date as of which the holders of Common Stock
of  record  entitled to such dividends are to be determined. For the purposes of
the  foregoing, a dividend other than in cash shall be considered payable out of
earnings  or  surplus  (other  than  revaluation or paid-in surplus) only to the
extent  that  such  earnings  or surplus are charged an amount equal to the fair
value  of such dividend as determined in good faith by the Board of Directors of
the  Corporation.

          (f)  Certain  Events.  If  any event occurs as to which in the opinion
               ---------------
of  the  Board  of  Directors  the  other provisions of this Paragraph 6 are not
strictly  applicable  or  if  strictly  applicable  would not fairly protect the
conversion  rights  of  the holder of the Preferred Stock in accordance with the
essential  intent and principles of such provisions, then the Board of Directors
shall  make  an  adjustment in the application of such provisions, in accordance
with  such  essential  intent  and  principles, so as to protect such conversion
rights  as  aforesaid, but in no event shall any such adjustment have the effect
of  increasing  the  Conversion  Price  as otherwise determined pursuant to this
Paragraph  6  except  in  the  event  of an increase in option price, additional
consideration  or conversion rate as contemplated by Paragraph 6(d)(4), and then
in  no  event to an amount larger than the Conversion Price as adjusted pursuant
to  paragraph  6(d)(4).

          (g)  No  Participating  Preferred  Stock.  So  long  as  any shares of
               -----------------------------------
Preferred  Stock  are  outstanding,  and  subject to the further restrictions in
Paragraph  9,  the  Corporation  will  not  issue any capital stock of any class
preferred as to dividends or preferred as to the distribution of assets upon any
voluntary  or  involuntary  liquidation,  dissolution  or winding-up unless such
preferential  rights  of  the holders thereof shall be limited to a fixed sum or
percentage  of  par  value  in  respect of dividends and distribution of assets.

          (h)  Stock  to be Reserved.  The Corporation will at all times reserve
               ---------------------
and  keep  available  out of its authorized Common Stock or its treasury shares,
solely  for  the  purpose  of


                                       13
<PAGE>
issue upon the conversion of the Preferred Stock as herein provided, such number
of  shares  of Common Stock as shall then be issuable upon the conversion of all
outstanding  shares  of  Preferred  Stock.  The  Corporation  covenants that all
shares of Common Stock which shall be so issued shall be duly and validly issued
and fully paid and nonassessable and free from all taxes, liens and charges with
respect  to  the  issue  thereof,  and,  without  limiting the generality of the
foregoing,  the  Corporation  covenants  that it will from time to time take all
such  action  as  may be requisite to assure that the par value per share of the
Common  Stock  is  at  all  times equal to or less than the effective Conversion
Price.  The  Corporation will take all such action as may be necessary to assure
that  all  such shares of Common Stock may be so issued without violation of any
applicable  law or regulation, or of any requirements of any national securities
exchange  upon  which  the  Common  Stock of the Corporation may be listed.  The
Corporation  will  not  take  any  action  that results in any adjustment of the
Conversion  Price  if  the  total  number  of  shares of Common Stock issued and
issuable  after  such action upon conversion of the Preferred Stock would exceed
the  total number of shares of Common Stock of such class then authorized by the
Corporation's  Certificate  of  Incorporation.

          (i)  Registration.  If  any  shares  of  Common  Stock  required to be
               ------------
reserved  for  purposes  of  conversion of the Preferred Stock hereunder require
registration with or approval of any governmental authority under any Federal or
State  law,  or  listing on any national securities exchange, before such shares
may  be  issued  upon  conversion,  the  Corporation will, at its expense and as
expeditiously  as  possible, cause such shares to be duly registered or approved
or listed on such national securities exchange, as the case may be.

          (j)  Issue  Tax.  The  issuance  of  certificates for shares of Common
               ----------
Stock upon conversion of the Preferred Stock shall be made without charge to the
holders  of  such  Preferred  Stock  for  any  issuance  tax in respect thereof,
provided  that the Corporation shall not be required to pay any tax which may be
payable  in respect of any transfer involved in the issuance and delivery of any
certificate  in  a  name  other  than  that of the holder of the Preferred Stock
converted.

          (k)  Closing  of  Books.  The  Corporation  will  at no time close its
               ------------------
transfer  books  against the transfer of any Preferred Stock or of any shares of
Common  Stock  issued or issuable upon the conversion of any shares of Preferred
Stock  in  any  manner  that  interferes  with  the  timely  conversions of such
Preferred  Stock.

          (l)  Definition of Common Stock.  As used in this Paragraph 6 the term
               --------------------------
"Common Stock" shall mean and include the Corporation's authorized Common Stock,
par  value


                                       14
<PAGE>
$.01  per  share,  as constituted on the date of issuance of the Preferred Stock
and  shall  also  include  any  capital  stock  of  any class of the Corporation
thereafter authorized which shall not be limited to a fixed sum or percentage of
par  value  in  respect  of  the rights of the holders thereof to participate in
dividends  or  in  the  distribution of assets upon the voluntary or involuntary
liquidation,  dissolution  or  winding  up  of  the  Corporation.

     7.   Certain  Definitions.
          --------------------

          (a)  Junior  Stock.  The  term "Junior Stock" shall mean any shares of
               -------------
any class or series of capital stock of the Corporation other than the Preferred
Stock,  any  Senior  Stock  or  the  Common  Stock.

          (b)  Senior  Stock.  The  term "Senior Stock" shall mean any shares of
               -------------
any class or any series of capital stock of the Corporation ranking prior to the
Preferred  Stock  in  respect  of  the  right  to  receive  dividends  and/or to
participate  in  any  distribution  of  assets  other  than by way of dividends.

          (c)  Parity  Stock.  The  term "Parity Stock" shall mean any shares of
               -------------
any class or any series of capital stock that, if dividends thereon are not paid
in full, be entitled to share ratably with the Preferred Stock in the payment of
dividends  including  accumulations,  if  any, in accordance with the sums which
would be payable on such shares if all dividends were declared and paid in full,
and/or  shall,  in the event that the amounts payable thereon on liquidation are
not  paid  in full, be entitled to share ratably with the Preferred Stock in any
distribution  of  assets  other  than by way of dividends in accordance with the
sums  which  would  be  payable  in  such  distribution if all sums payable were
discharged  in  full.

     8.   Voting,  Rights  of  Preferred  Stock.
          -------------------------------------

          (a)(i)    Except  as otherwise provided in this Paragraph 8, or by law
expressly  otherwise provided, the holder of each share of Preferred Stock shall
have  the  right  and  power to vote, together with the holders of all the other
shares  of  Preferred  Stock  and  the  holders of all the outstanding shares of
Common  Stock  and not by classes, on each matter on which the holders of record
of  the Common Stock shall be entitled to vote (subject, in the case of election
of  directors,  to  the provisions of paragraphs 8(a)(ii) and 8(a)(iii) hereof),
and  the  holders  of  the  Preferred Stock shall receive notice of and shall be
entitled to attend in person or by proxy any meeting of stockholders. The number
of  votes  which the holder of each share of Preferred Stock is entitled to vote
pursuant  to  this  paragraph  8(a)(i) shall be equal to the number of shares of
Common


                                       15
<PAGE>
Stock  into  which  each  share of Preferred Stock is convertible, as determined
from  time to time by the provisions of Paragraph 6 hereof.  For the purposes of
computing  the  voting  rights  of  the  Preferred  Stock, the Corporation shall
compute the aggregate number of shares of Common Stock into which all the shares
of  Preferred Stock held by each holder of the Preferred Stock may be converted,
and  any  resulting  fractional  shares  of Common Stock shall be rounded to the
nearest whole number (which, in the case of one-half or more of a vote, shall be
rounded  upward).

          (ii) The  holders  of the 2002 Series A Preferred Stock shall have the
right and power to one vote per share, voting as a single class, separately from
all  other classes and series of capital stock of the Corporation, to elect four
(4)  members  of  the Board of Directors of the Corporation.  The holders of the
2002  Series  B,  C, and D Preferred Stock shall have the right and power to one
vote  per  share,  voting  together as a single class, separately from all other
classes  and series of capital stock of the Corporation, to elect one (1) member
of  the  Board  of  Directors.

          (iii) Notwithstanding  the  provisions  of  Paragraph 8(a)(ii), in the
event  that less than 4,000,000 shares of 2002 Series A Preferred Stock are held
collectively  by  CAI  Partners  and  Company II, L.P., CAI Capital Partners and
Company  II,  L.P.,  CAI  Capital  Partners  and  Company II-C, L.P. and Jack R.
Anderson, then the holders of all the series of Preferred Stock, voting together
as  a  single class, shall have the right and power to elect five (5) members of
the  Board  of  Directors  and the provisions of Paragraph 8(a)(ii) shall not be
applicable.

          (iv) If  any  vacancies  occur  in  the  Board  of  Directors  of  the
Corporation by reason of the death, resignation, retirement, disqualification or
removal from office or otherwise of any director elected by a one or more series
of Preferred Stock pursuant to paragraphs 8(a)(ii) or 8(a)(iii), then a majority
of  the directors elected pursuant to paragraph 8(a)(ii) or 8(a)(iii) may choose
a  successor or successors and the director(s) so chosen shall hold office until
the  election  of  a  successor or successors by the vote of the holders of such
series  of Preferred Stock that originally elected the director(s) to the vacant
positions.

          (b)  In  addition  to  any  voting  rights provided herein, unless the
consent  or approval of a greater number of shares shall be required by law, the
affirmative  consent of the holders of at least 75% of the shares of each series
of  the Preferred Stock then issued and outstanding, given in person or by proxy
either  in writing or at a meeting called for that purpose at which such holders
of  each  respective series of Preferred Stock shall vote separately as a class,
shall  be necessary for authorizing and approving: (i) the amendment, alteration
or  repeal  of any of the provisions hereof which have reference to or which are
protective  of,  or  the  taking  of  any


                                       16
<PAGE>
action which adversely affects, the preferences, rights, powers or privileges of
such  series  of  the Preferred Stock, (ii) the authorization or issuance of any
shares  of any class or series of Senior Stock or Parity Stock to such series of
Preferred  Stock  or  (iii)  any change in the number of members of the Board of
Directors  of  the  Company  from  seven  (7).

     9.   Payments  Due  on Saturday, Sunday or Legal Holiday.  In case the date
          ---------------------------------------------------
of  fixed  for  redemption of any shares of Preferred Stock shall be a Saturday,
Sunday  or,  in  New  York,  N.Y.,  a  legal  holiday  or a day on which banking
institutions  are  authorized  or required by law or executive order to close or
remain closed, the making of a redemption on such stock need not be made on such
date  but  may  be made on the next succeeding day not a Saturday, Sunday, or in
such  city,  a  legal holiday or a day on which banking institutions are closed,
with  the  same  force and effect as if made on such date fixed for redemption."

     And  it  was  further

          RESOLVED,  that  the statements contained in the foregoing resolutions
     setting  forth  and  fixing  (i)  the  Certificate of Powers, Designations,
     Preferences  and  Relative, Participating, Optional or Other Special Rights
     and  (ii) the Qualifications, Limitations, or Restrictions of 2002 Series A
     Preferred  Stock,  2002  Series  B Preferred Stock, 2002 Series C Preferred
     Stock  and  2002  Series  D  Preferred  Stock  and  fixing  the  powers,
     designations,  preferences  and  relative, participating, optional or other
     special rights and the qualifications, limitations, or restrictions thereof
     shall  be  deemed  to  be  included  in and be a part of the Certificate of
     Incorporation  of  SafeGuard  Health  Enterprises,  Inc.  pursuant  to  the
     provisions of Sections 104, 151 and 242 of the Delaware General Corporation
     Law;  and

          FURTHER  RESOLVED,  that each share of such 2002 Preferred Stock shall
     be  issued  in  exchange  for the currently outstanding shares of Preferred
     Stock  of  the  Corporation  on  the basis of 100 shares of the same series
     (i.e.,  Series A for Series A) of the 2002 Preferred Stock for one share of
     the  currently  outstanding  shares  of  2001  Preferred  Stock;  and

          FURTHER  RESOLVED, that each share of the currently outstanding shares
     of 2001 Preferred Stock so exchanged shall be retired.


                                       17
<PAGE>
     IN  WITNESS  WHEREOF,  the  undersigned,  the  President  and  Secretary of
SafeGuard  Health  Enterprises,  Inc., have executed this Certificate, this ____
day  of  __________,  2002.

                              SAFEGUARD  HEALTH  ENTERPRISES,  INC.


                              By:
                                 -----------------------------------------------
                              Name:   James  E.  Buncher
                              Title:  President  and  Chief Executive Officer


                              By:
                                 -----------------------------------------------
                              Name:   Ronald  I.  Brendzel
                              Title:  Senior  Vice  President  and  Secretary


                                       18
<PAGE>